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Two Things You Need To Know About Prepaid Debit Cards
According to the September 2004 issue of the Nilson Report,
around $588 billion dollars worth of debit cards were bought in
the United States in 2003. By 2008 that volume is expected to
grow to $1.231 trillion putting a significant dent in the
nation's use of pure credit cards as consumers continue to favor
the use of prepaid debit cards. If you are among the nation's
millions who are currently using prepaid debit cards or are among
those considering their use, you need to know two things that may
detract and enhance your use of the prepaid debit card.
First, know what you're getting. Most people understand the
prepaid debit card as the retail gift card. Others know that such
gift cards can be purchased through their local bank. What some
consumers don't know is that those purchased through their bank
can come with hefty fees attached, and those fees can come in a
myriad of disguises from up-front purchase fees to various
administration fees including replacement costs account
maintenance fees and fees for checking the balance. Such fees are
currently being debated in the courts, but until a fair
resolution is offered, it is up to the consumers to be aware of
what they are buying.
Second, despite consumer and fair trade concerns, some
applications of the prepaid debit card are both innovative and
convenient. For example, there are now some tax preparation
services offering what is known as the "stored value" card. In
other words, in lieu of waiting for your refund to arrive, you
can simply tell your tax preparation service that you would like
to have your refund loaded onto your prepaid debit card. Once you
have your prepaid debit card "loaded" you can make arrangements
with your bank to assign it a routing number so that you may use
it just like a checking account. Another new use of prepaid debit
cards come from the currency exchange companies, better known as
remittance services. The usual remittance companies such as
Western Union and MoneyGram are facing new competition from small
companies who are targeting the immigration population by
offering speed and convenience in sending money on-line using a
bank account, a credit card or a PayPal account. The customer
simply electronically "loads" the desired amount onto a Visacard
which is then mailed to the beneficiary.
With the help of the internet, the potential to send money via
"loaded" cards is without precedent. The ease, speed and
convenience of such services are becoming so popular that many
companies are aggressively marketing prepaid debit cards to
consumers through customization. Visa, for example, has a prepaid
debit card marketed exclusively to teens, know as Buxx. American
Express has the TravelFunds Card marketing "for people on the go"
and MasterCard has its I-Gen MasterCard marketed to those who
prefer to either forego traditional checking accounts or keep
only a minimum amount while "loading" their card with the cash
their budgets dictate they can spend.
© Gunnar Berglund
Gunnar Berglund has been working on the Internet for about five
years and runs http://www.global-prepaid-cards.com
since September 2003
MORE RESOURCES:
EnerJex completes $50M credit facilityBizjournals.com, NC - 15 hours agoIn a release Tuesday, Overland Park-based EnerJex (OTCBB: EJXR) said it will use proceeds from the facility to redeem $6.3 million of outstanding 10 percent ... |
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